The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey shows that the total number of loans now in forbearance decreased by 7 basis points from 7.74% of servicers’ portfolio volume in the prior week to 7.67% as of July 26.
According to MBA’s estimate, 3.8 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the eighth week in a row to 5.41% – an 8-basis-point improvement. Ginnie Mae loans in forbearance increased by 1 basis point to 10.28%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased by 16 basis points to 10.37%.
The percentage of loans in forbearance for depository servicers dropped to 7.95%, while the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased to 7.81%.
“The share of loans in forbearance declined, but we are now seeing a notable pattern developing over the past two weeks. The forbearance share is decreasing for GSE loans but has slightly increased for Ginnie Mae loans,” says Mike Fratantoni, MBA’s senior vice president and chief economist.
“The job market has cooled somewhat over the past few weeks, with layoffs increasing and other indications that the economic rebound may be losing some steam because of the rising COVID-19 cases throughout the country,” he adds. “It is, therefore, not surprising to see this situation first impact the Ginnie Mae segment of the market. The higher level of Ginnie Mae loans in forbearance will increase the amount of payments that servicers must advance.”
Total weekly forbearance requests as a percentage of servicing portfolio volume decreased relative to the prior week, from 0.13% to 0.10% – the lowest level reported since early March.